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I cannot figure out how to set up the following word problem into an equation.

Raoul invested \$40,000 in 2 different types of bonds. The first type earned 4% and the second type earned 5%. If the profit (interest) on the 5% bonds was $200 more than the profit (interest) on the 4% bonds, how much did Raoul invest in the 5% bonds?

This is what I have so far:

x= how much Raoul invested in the 5% bond. 50,000 - x = how much Raoul invested in the 4% bond.

But how can I us the $200 more profit earned if I don't know the amount of profit in the first place?

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  • $\begingroup$ It looks like 40,000 in the second paragraph became 50,000 in the fourth. $\endgroup$
    – Barry Cipra
    Apr 12, 2016 at 16:52
  • $\begingroup$ What is the capital $\$40,000$ or $\$50,000$? $\endgroup$
    – Ángel Mario Gallegos
    Apr 12, 2016 at 17:13

1 Answer 1

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Hint: The statement

the profit (interest) on the $5\%$ bonds was $\$200$ more than the profit (interest) on the $4\%$ bonds

put in algebraic terms gives the equation

\begin{align*} 0.05x&=0.04(40,000-x)+200 \end{align*}

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  • $\begingroup$ @j3238254 Therefore Raoul invested $\$50,000$ ? $\endgroup$
    – callculus42
    Apr 12, 2016 at 17:08
  • $\begingroup$ @callculus: According to the statement must be $\$40,000$. I hope the OP pay attention at this point. Thanks. $\endgroup$
    – Ángel Mario Gallegos
    Apr 12, 2016 at 17:11

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